Company cars

Company car policies

Guide

Whether your fleet is company-owned, leased, or supplied by an agency, you should create a company car policy.

What to include in a company car policy

Your company car policy should include topics such as:

  • what types of car to purchase - there may be financial advantages to choosing certain models but there may also be benefits to choosing from a wider range
  • setting a CO2 limit on your cars
  • putting in place a replacement policy - eg replacing the vehicle after a certain number of years or at a specific mileage
  • allowing your employees to trade up or down (within the approved list) with an appropriate salary adjustment
  • offering a cash alternative to employees
  • offering incentives for employees to switch to other forms of transport
  • information on any tracking devices and data handling

Company car approved vehicle list

When you select cars for your fleet, you should think about their safety, environmental performance, cost and suitability for purpose. You can then produce an approved vehicle list that:

  • specifies the makes and models of cars currently available
  • gives all the New Car Assessment Programme (NCAP) safety ratings and official CO2 emissions for the cars available
  • specifies the company car tax implications for each car type

Your employee can then choose from the list of cars and must accept the conditions of your Company Drivers' Policy and sign and return the Drivers Declaration.

You should make it compulsory for all business drivers to submit copies of their driving licences, or use a third party to run a thorough check with the Driver and Vehicle Licensing Agency.

Company car health and safety responsibilities

You have a duty of care to your employees to make sure the cars they drive for work are as safe as possible. You must conduct risk assessments and put a range of policies and procedures in to practice. For more information see HSE guidance on driving at work.

All company cars must achieve a rating of at least NCAP 4 stars and preferably NCAP 5 stars for adult occupant safety.

Company car policy template

You can download and adapt the Energy Saving Trust's sample fleet policy template (DOC, 42K).